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A Burger King in Glendale, Cal., September 2, 2010.
It appears the somewhat creepy Burger King figure in the company's TV ads is catnip to some people.
Like a few really wealthy investors at a New York private-equity firm called 3G Capital Management who have agreed to buy the fast-food chain for $3.26 billion or $24 a share.
And all those who doubt the willingness of banks to lend money in the current economic climate, fear not. Banks are lending most of the money for this deal, $2.8 billion.
Some salient facts about BK to ponder. The company has spent decades trying to get out of McDonald's shadow and just never has pulled it off.
As The Wall Street Journal reports:
Burger King has struggled in recent years with both the recession and McDonald'sCorp., its biggest rival. Franchisees and analysts blame the chain's problems on scant menu development, flawed pricing and an overworked strategy of focusing on so-called super fans, people aged 18 to 34 years old who account for half of all visits to Burger King outlets but have been disproportionately hurt by the economic slump.
This "super fan" concept was news to me. I had no idea Burger King got so much of its sales from a relatively small percentage of its patrons.
USA Today in 2007 explained just how important these super fans are to BK.
That's BK's term for mostly 18- to 35-year-old males who gobble fast food at the devil-may-care clip of nine to 16 times a month. While they're just 18% of Burger King's customers, they account for about half of all visits to the stores.
The reason for the focus is that it's a lot harder to coax a Panera Bread regular to trade down to a burger than it is to get a superfan to come in once more per month.
The same story explained that the whole creepy king thing arises from the company's marketers trying to persuade consumers, especially those super fans, that it's "hip."
Anyway, it's also worth noting that the company has bounced back and forth from being a public company to private to public again. The King has had a lot of masters in a relatively very short period.
Again from the WSJ:
In the past decade, the company has gone from publicly held to private to public again. In 2002, a group led by TPG Capital LLC, Bain Capital LLC and Goldman Sachs Capital Partners bought the burger chain from DiageoPLC. Burger King then went public in 2006, though the private-equity consortium retains about 32%.